Dear Friend of GATA and Gold:
GATA can’t vouch for the data published in the latest edition of Alan M. Newman’s financial letter, Crosscurrents, which argues that financial manipulation has become the main pursuit of the United States economy, but he is far from alone in his observations. Commentary about this trend arose around 20 years ago, perhaps first in The New Republic magazine. And there is a well-established entry about it at Wikipedia, the Internet encyclopedia, here:
http://en.wikipedia.org/wiki/Financialization
Newman writes that dollar trading volume (presumably in U.S. markets) now is more than four times larger than the U.S. gross domestic product as well as four times larger than total stock market capitalization. “The churn continues at the most ferocious pace, making a mockery of our capital markets,” Newman writes. “The theme of investing for the future is now meaningless as high-frequency trading distorts price discovery, resulting in gross pricing inefficiencies.”
This echoes what GATA board member Adrian Douglas, publisher of the Market Force Analysis letter (www.MarketForceAnalysis.com), often has written about the gold and silver markets particularly — that paper trading is scores of times greater the actual metal traded and, perhaps more important, scores of times greater than actual metal available for delivery.
This means, as you’ve heard from this quarter before, that there are no markets anymore, just interventions (http://www.gata.org/node/6242), with the virtually infinite amounts of money necessary for manipulation being delivered by central banks to the monster financial houses that act as their agents both officially and openly as well as unofficially and surreptitiously.
